Social Security and Stay-at-Home Moms

by Melissa Stanton

Every May, in honor of Mother's Day, Salary.com announces how much the work of a stay-at-home mother is worth. Her annual salary, or value, in 2009, since in the real world the salary is a fantasy: an impressive $122,732. (And that's based on only 10 job functions typically performed by stay-at-home moms.) It's nice to be valued.

What isn't so nice is that although stay-at-home moms are given lip service about their value and importance, full-time stay-at-home motherhood is not recognized in any way as the job it really is. While I'm not saying stay-at-home mothers (and dads) should be paid a salary, per se, it sure would be nice if those years as primary caregivers of young children wasn't so potentially damaging to a full-time parent's future Social Security retirement benefits.

(A caveat: For purposes of this discussion, let's just assume that Social Security will be around when you become eligible to collect retirement benefits. Currently, the age at which people born after 1960 can collect full benefits is 67. Please put out of your mind the possibility that by time you’re 67-years-old the full-benefit age might be 92.)

Here's the rub: A person's Social Security benefit -- which is the value of the monthly check she will receive in old age -- is based on having a total of 35 years of paid employment. For each year, a certain number of "credits" are provided. You need to have 40 credits to be eligible for your own benefits. (At the current four credit maximum per year, that requires at least 10 years of employment.) To calculate the value of a person's retirement benefits, the Social Security Administration totals the earnings from the highest 35 years of income, and then divides that number by 35. Using various rate sheets and tables, that sum is then translated into a benefit. Men generally have no problem meeting or exceeding a work-life of 35 years (unless of course they die). Women have a tougher time.

The unfairness of the benefits formula is that a woman gets zero—zippo, nada, a big N.O. -- benefit or recognition for the years she works around the clock as a stay–at–home mom. As women are more likely than men are to step in and out of the workforce, a woman's 35 years often includes many years of zero or near zero income, which drags down her average and is one of many reasons a woman’s Social Security check is commonly smaller than a man's.

Naysayers argue that because stay-at-home moms don't earn an income, they don't contribute to the economy or the Social Security coffers. A counterargument is that stay-at-home mothers do contribute mightily to the economy as consumers and as part of a taxpaying couple. Because there is no "official" benefits-related recognition of the work of stay-at-home parents, women (as well as an increasing number of men) are essentially having to choose between their children's immediate needs and their own need for financial security in old age.

In an article for the advocacy organization Mothers and More, its president at the time, Kristen Maschka, calculated that by leaving the workforce for seven years to stay home with her child, she would be forfeiting $2,000 a month in future Social Security benefits. "Assuming I live to be eighty-seven," she writes, "that's nearly half a million dollars." (Another great advocacy organization for moms is MomsRising.org.)

THE 50 PERCENT SOLUTION

In lieu of recognizing that stay–at–home parenting is work, the government allows a married woman to collect off of her spouse's work history instead, if receiving 50 percent of his benefit amount calculates to being more than 100 percent of hers. (And this scenario is also true in the other direction, with the husband collecting based on his wife's earnings.) So if a women and her spouse make it to retirement together and an anniversary of more than a decade of marriage, she can collect either her benefit or an amount that's half of his. For example: If John gets $5,000 a month, Jane gets $2,500, so as a couple living together they bring in $7,500 monthly.

A divorced woman can collect spousal benefits, so long as the marriage lasted 10 years. In such a scenario, a divorced Jane who had 10-plus years vested in a marriage can still claim the 50 percent spousal benefit, but since she's no longer in the same household as John, unless she remarries, the Social Security income coming into her home is just $2,500 instead of the $7,500 she would have had access to had the marriage not dissolved.

Unfortunately, because of the decade rule, a woman who stayed home with her children for six years of her seven-year marriage receives no spousal benefits. An unmarried stay–at–home parent who has children with a partner has no protection. If she has her own work history, she may have access to a benefit of her own. But if she were a teenage or young mother and continues to have a minimal employment history, she's at risk of becoming a very poor old lady.

The cost of an unpaid stay–at–home career -- or a paid career that makes accommodations to parenting responsibilities -- varies for each woman.

You can calculate your future benefits (and losses) by visiting Benefits Calculator. For more information about your Social Security eligibility and benefits, visit the Social Security Administration website or Social Security Information for Women.

Melissa Stanton is the author of The Stay-at-Home Survival Guide: Field-tested strategies for staying smart, sane, and connected while caring for your kids (Seal Press/Perseus Books). Prior to becoming a stay-at-home mother of three (including twins), she was a senior editor at LIFE and People magazines. Visit with Melissa, and learn more about her book, at Real Life: Support for Moms . Become her Facebook friend via The Stay-at-Home Survival Guide fan page.

Copyright © Melissa Stanton. Permission to republish granted to Pregnancy.org, LLC.